Yes, there is a formula to allocate funds by state based upon a) gas tax revenues contributed, b) miles of highway and c) population, but — like the tax code — there are loopholes and exceptions. 

First, it is important to know that HTF monies are not given away with zero commitment at the state level.  For each project, there is a required state match (how the match is raised varies from state to state).  Typically, the match for capital projects or purchases is 80/20, with 20% being the state obligation.  Therefore, generally speaking, the 18.4¢ per gallon that each driver pays into the fund is matched at the state level by approximately 3.7¢.

Since 1983, 2.86 cents of each gallon’s tax is reserved for the Mass Transit account.  With a 20% match by the state, this amount becomes to 3.43 cents per gallon.  However, by law this is only to be used on capital expenditures…i.e., buying buses and other equipment.  The match is actually 50/50 when it comes to transit operations. 

So, buying buses and rolling stock is possible, but finding the money to put them to use is very difficult, and must be hobbled together from many sources.  Unless a locality makes transit a priority, the lack of funding to operate the system keeps it small and, as a result, less convenient than jumping in the car.

(By now, you know where this is going, and it might get me flamed on these pages for being mode-biased.  I will state here and now that I like and need my car; I just wish I had more choices available to suit my destinations and my schedule.  I would surely excercise those choices!)

Meanwhile, when it comes to highway funding match, all states are not treated equally.  States with a large amount of Federal land (which accounts for a lot of states west of the Mississippi), are awarded HTF money on a sliding scale.  The sliding scale decreases the local match requirement for highway projects, but does not do the same for transit. 

In Idaho, for example, the local match requirement for highway projects is only 7.34 %, but it is still 20% for transit capital, and 50% for transit operations, resulting in a built in bias toward roads.  Why would a region chose to augment alternative modes of transportation when they can build roads at a fraction of the cost (to their own budget)?

Obviously, the HTF is in crisis;  I am not suggesting that transit needs a bigger part of that pie…the 15.54 cents per gallon that funds roadway projects has to cover a lot of ground (see page 11 in the link).  The solutions to our problems lie not only in the ways that we spend money on transportation projects, but also in the ways we raise that money.  We will explore the latter issue in a forthcoming post.

Special Thanks to Contributing Writer and Editor, Donald Galligan, AICP, Transportation Planner and all around nice guy.

Where does the money to build and fix roads come from?  Since 1956, U.S. roadway infrastructure projects have been largely funded by the Highway Trust Fund (HTF).  Money is pooled into the HTF via an 18.4 cents per gallon gasoline tax (24.4 cents on diesel).  Other sources of income include taxes on tires, and the sale of heavy trucks and trailers.   Once collected, these revenues are placed in a dedicated account, The Highway Trust Fund.  Monies from the HTF are then re-distributed to individual states according to a formula based upon linear highway miles, population, and the amount of gas tax revenues originally contributed by the state to the HTF. ¥

This is all fine and dandy, but is it sustainable?  The answer has proven to be “No.”

In recent years, a confluence of factors has led to an emergency-level shortfall in the Highway Trust Fund.  These factors, while not in and of themselves bad, are individually daunting and collectively catastrophic to our antiquated funding mechanisms.  They include:

• high gas prices which have forced motorists to drive less,
• popularity of cars that get better gas mileage,
• the emergence of alternative fuels,
• the federal portion of the gasoline tax has not changed since 1993
• the rising expense of road maintenance, materials and construction

It is difficult to argue that this 50-year-old funding mechanism anchored in a time of cheap land, labor and materials is adequate to satisfy the needs of a modern nation.   In my next post, I’ll address a number of alternative proposals which are swirling about for replacing/upgrading our transportation infrastructure funding mechanisms.

(¥ Wow…does anyone else see how this promotes an SUV culture and ever more asphalt?)

Special Thanks to Contributing Researcher & Writer Crystal Pendergrass, civil engineer/jobseeker, and to Contributing Editor, Donald Galligan, AICP, Transportation Planner all around nice guy.

• One-third of the nation’s highways – interstates, freeways and major roads – are in poor or mediocre condition.
• More than one-quarter of major urban roads, which carry the brunt of national traffic, are in poor condition.

To surmise: Our roads and bridges are falling apart, just like my nearly 90 year-old house.  And like my house, maintenance costs are going up.  But wait – it’s worse than that.  As the roads deteriorate, our dependency upon them is increasing due to population growth and trends to dispersion (i.e. suburban living).  This heavy use means serious maintenance is in order; and, coupled with a demand for more roads, our auto-centric lifestyles are quickly outstripping the funds available to keep us moving in our personal, four-wheeled castles.

Take a look at the American Society of Civil Engineering’s 2009 Infrastructure Report Card, where the nations’ infrastructure receives an overall grade of “D.”  Do these films describe an economic powerhouse or the dilapidated third world?  Is this not perceived as a crisis to the general population because we can’t see or feel the problem unless we experience a failure?  (P.S. intolerable traffic = failure.)

ASCE Film Credits

Special Thanks to Contributing Researcher & Writer Crystal Pendergrass, civil engineer/job seeker, and to Contributing Editor, Donald Galligan, AICP, Transportation Planner and all around nice guy.